(NA) Not happy with house price?(NA

The biggest mystery of my life. What will real estate prices do in the next 12-24 months

We are meeting with a broker to decide whether or not to list our house and to do a market analysis. They of course will come back with this is a perfect time to sell.

in the mean time we've been looking in a different area for a house to buy. Still nothing but overpriced junk on the market

For us this is the biggest decision of our lives. We've spent the last five years and nearly $1m remodeling this house. The sale is our retirement. Get this one wrong (which we might have already done by not selling last spring), and we delay retirement.

On my 9 mile drive to my office, they are pushing dirt on over 6,000 new lots. The big money is still betting on the ability to sell those houses with this current market.

Or it could just be that the sunk cost in those developments was too high to wait for a pause. Feels a little like 2007
 
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Ask them if they've been tracking prices at the supermarket lately? Those dollars don't have the purchasing power they used to have.
 
cowtowner said:
On my 9 mile drive to my office, they are pushing dirt on over 6,000 new lots. The big money is still betting on the ability to sell those houses with this current market.

Or it could just be that the sunk cost in those developments was too high to wait for a pause. Feels a little like 2007
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The DFW building market is insane. Been shooting photos here for the last decade now and the growth is mind blowing... and people are paying those prices at least right now. The apartment I was in 7 years ago is 50% more expensive today with no significant improvements and they are very high occupancy.
 
How did your agent come up with the price? This is for a house in our neighborhood... Also, tell your agent not to accept any offers lower than X. amount They have to bring you all offers and you may have to sign something.

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^Isn't that graph an amazing depiction of an irrational market adjustment? Nothing really occurred in the world that should justify that increase (pandemic didn't really change housing supply and interest rates had been low for over a decade), but there it is, pretty much the same in most of the rest of the country.
 
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The pandemic certainly did change housing supply. Many people that might have moved previously chose to stay in their current homes while the pandemic played out. Couple that with new houses not being built at the same rate because of supply chain issues driving prices up if you could even get materials during the pandemic all led to fewer houses being available to purchase. Less supply means what was out there was going for higher prices. Now that we are throught the pandemic you can see in that graph a slight downturn in prices and I suspect that the housing market will start to self correct back over time.
 
kmacht said:
The pandemic certainly did change housing supply. Many people that might have moved previously chose to stay in their current homes while the pandemic played out. Couple that with new houses not being built at the same rate because of supply chain issues driving prices up if you could even get materials during the pandemic all led to fewer houses being available to purchase. Less supply means what was out there was going for higher prices. Now that we are throught the pandemic you can see in that graph a slight downturn in prices and I suspect that the housing market will start to self correct back over time.
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Housing supply wasn't a major factor unless you think that we just had a huge backlog of people who suddenly had the means to buy new houses despite having record job losses in that same period. If anything, you should have seen more pullback on demand as people decided to stay in their existing homes (or apartments) when their livelihoods were threatened. We didn't have a population explosion that necessitated a ton of new homes needing to be built, but just like with the toilet paper shortages, people panicked and started to buy new homes/building materials (people did decide to do a lot of renovations due to more time spent at home). The graph on that particular home above showed about a a 1/3 increase in home value in the span of 2 years . . . 1/3! The cause of the end result today has less to do with the housing market and more to do with outright monetary inflation.
 
SoonerAviator said:
^Isn't that graph an amazing depiction of an irrational market adjustment? Nothing really occurred in the world that should justify that increase (pandemic didn't really change housing supply and interest rates had been low for over a decade), but there it is, pretty much the same in most of the rest of the country.
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What were the interest rates again?

Where I live, we have people selling their homes in the Bay Area (San Francisco area), coming here, and paying cash with the equity they earned. Homes were/are selling in hours, not days.

Two doors down, the home went on the MLS Friday afternoon, had an open house on Saturday, and was listed as pending on Monday afternoon... Nuts!
 
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Ventucky Red said:
What were the interest rates again?

Where I live, we have people selling their homes in the Bay Area (San Francisco area), coming here, and paying cash with the equity they earned. Homes were/are selling in hours, not days.

Two doors down, the home went on the MLS Friday afternoon, had an open house on Saturday, and was listed as pending on Monday afternoon... Nuts!
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I agree, but it doesn't make it rational for the people buying those Bay Area homes at insane prices. It is/was a fantastic time to sell if you were a) selling in a high-cost area and moving to a lower-cost area and would be able to get more for your money, or, B) downsizing (retirement, etc.) and able to roll that equity into a cash purchase of a smaller home. The chickens will come home to roost eventually when the people who bought in at top-prices try to sell their home in a few years and possibly find themselves upside-down.

I mean, average 30yr mortgage rates have been between in the 3%-5% range since the 2008 financial collapse, so it's not like there was suddenly some rush to sign up for a mortgage rate that had been around those levels for a solid decade. It was a great time to buy in regard to interest rates no doubt, but I doubt most home buyers were "sitting on the edge" waiting for rates to go lower suddenly in 2020.
 
SoonerAviator said:
Yeah, I'd think the realtor would filter that crap out unless there were multiple prospects all leaving that same feedback and we needed to reevaluate the market pricing.
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It depends, in many states the realtor is legally obligated to tell you.

Tim
 
SoonerAviator said:
Housing supply wasn't a major factor unless you think that we just had a huge backlog of people who suddenly had the means to buy new houses despite having record job losses in that same period. If anything, you should have seen more pullback on demand as people decided to stay in their existing homes (or apartments) when their livelihoods were threatened. We didn't have a population explosion that necessitated a ton of new homes needing to be built, but just like with the toilet paper shortages, people panicked and started to buy new homes/building materials (people did decide to do a lot of renovations due to more time spent at home). The graph on that particular home above showed about a a 1/3 increase in home value in the span of 2 years . . . 1/3! The cause of the end result today has less to do with the housing market and more to do with outright monetary inflation.
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In New England and the Mid Atlantic markets, a very significant amount of the purchases were second homes. When remote work became possible for many office workers, they left the close in suburbs and bought second homes one to two hours away from the downtown areas. I am sure this was repeated all over the country.

By no means is the single answer, but it is part of the picture for the increase in demand.

Tim
 
Last summer: A real estate agent, knocks on my door. I open the door, and she hands me her card, and a piece of paper with a $$ figure on it.
"Hi, I'm Beth. I have a buyer for your house. Here is the offer. How soon can you be out?"
I. Am. Gobsmacked. Speechless. Stunned.
I recover. I look at her, I look at the piece of paper. I laugh out loud. The price is what the house was worth 6 or 7 years ago.
I cross off her offer, and write a crazy counter offer, and a fee which is half again my "asking" price.
"That's how much I want for the house, and the fee is an "Aggravation Fee" for having to deal with you on my front porch."
Her nose out of joint: "You could have just said it wasn't for sale."
"Nope. I wanted to be just as rude as you are."

There are some weird ones walking the earth and it's not just house sales they are haunting.

I was selling a motorcycle last year and a high school teacher shows up.
He loves the bike, but he doesn't like the brand of tires, doesn't like the custom, programmable ECM (I'm including the software AND the laptop in the sale of the bike), doesn't like the style of the marker lights (they were standard Suzuki that came with the bike).
He wants me to take $2,000.00 off the price so he can change all the things he doesn't like.
Says me: "Sorry that's not how this works."
He gets all upset because "Yes it is how this works!"
Have a nice day. He leaves.
The next guy who showed up, same day, looked at the bike, handed me my asking price, in cash. I asked him if he wanted to ride it. "Nope, just start it."
OK. He put it on a trailer and off he went.
Two days later the teacher calls and offers to take it for $1975.00 off my asking price. "Sorry, I sold the bike the same day you looked at it."
He started screaming at me that I had "No Right" to sell the bike because he saw it first.

I sold a set of skis. I didn't need two pair for my plane.
1500s. They were like brand new.
One guy offered me half price because he would have to paint over the yellow paint.
"Sorry. That's not how this works."
The next guy offered me an extra $100.00 dollars to hold them while he drove 400 miles to pick them up.
I gave him his $100.00 back and bought him lunch.
 
tspear said:
In New England and the Mid Atlantic markets, a very significant amount of the purchases were second homes. When remote work became possible for many office workers, they left the close in suburbs and bought second homes one to two hours away from the downtown areas. I am sure this was repeated all over the country.

By no means is the single answer, but it is part of the picture for the increase in demand.

Tim
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I can certainly buy that explanation for a small portion of the demand spike.
 
SoonerAviator said:
I can certainly buy that explanation for a small portion of the demand spike.
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No idea on portion for the market at large, but my younger brother is a broker outside DC (Maryland side, towards Annapolis). When I asked him, his answer was roughly half the sales in 2021 and 2022 for his team were from people buying a second home for remote work.

Tim
 
tspear said:
No idea on portion for the market at large, but my younger brother is a broker outside DC (Maryland side, towards Annapolis). When I asked him, his answer was roughly half the sales in 2021 and 2022 for his team were from people buying a second home for remote work.

Tim
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Probably significant for those in the NE/West coast major cities who were used to long commutes. The middle-80% of the country, probably not so much. Just my guess anyway.
 
Shepherd said:
Last summer: A real estate agent, knocks on my door. I open the door, and she hands me her card, and a piece of paper with a $$ figure on it.
"Hi, I'm Beth. I have a buyer for your house. Here is the offer. How soon can you be out?"
I. Am. Gobsmacked. Speechless. Stunned.
I recover. I look at her, I look at the piece of paper. I laugh out loud. The price is what the house was worth 6 or 7 years ago.
I cross off her offer, and write a crazy counter offer, and a fee which is half again my "asking" price.
"That's how much I want for the house, and the fee is an "Aggravation Fee" for having to deal with you on my front porch."
Her nose out of joint: "You could have just said it wasn't for sale."
"Nope. I wanted to be just as rude as you are."

There are some weird ones walking the earth and it's not just house sales they are haunting.

I was selling a motorcycle last year and a high school teacher shows up.
He loves the bike, but he doesn't like the brand of tires, doesn't like the custom, programmable ECM (I'm including the software AND the laptop in the sale of the bike), doesn't like the style of the marker lights (they were standard Suzuki that came with the bike).
He wants me to take $2,000.00 off the price so he can change all the things he doesn't like.
Says me: "Sorry that's not how this works."
He gets all upset because "Yes it is how this works!"
Have a nice day. He leaves.
The next guy who showed up, same day, looked at the bike, handed me my asking price, in cash. I asked him if he wanted to ride it. "Nope, just start it."
OK. He put it on a trailer and off he went.
Two days later the teacher calls and offers to take it for $1975.00 off my asking price. "Sorry, I sold the bike the same day you looked at it."
He started screaming at me that I had "No Right" to sell the bike because he saw it first.

I sold a set of skis. I didn't need two pair for my plane.
1500s. They were like brand new.
One guy offered me half price because he would have to paint over the yellow paint.
"Sorry. That's not how this works."
The next guy offered me an extra $100.00 dollars to hold them while he drove 400 miles to pick them up.
I gave him his $100.00 back and bought him lunch.
Click to expand...


Some crazy stuff...

I was selling a boat once and I had Nigerian Prince call and offered me a gazillion, trillion dollar over my asking price if I deliver the boat to his shipping agent.
I told him that - sorry this is not how it works, you show up in person with cash and hand it to me, I give you the boat and off we go...
All I heard was "click." :p

We had a similar experience with a real-estate agent.. saying with prices where they are now, this is a good time to sell.. I explained that we very happy and have not plans to sell.. She accepted it and moved on.
 
We just closed a few months ago and got 6.75% which isn’t ideal but we had absolutely no bidding war. We put in offer in after we viewed the house, owner countered that night and we accepted the following day. I think the house was
on the market for 2 months. We wanted to buy during Covid but I didn’t know if I was going to get furloughed. We also would have had way more competition.
 
Update! Accepted a no contingency offer very close to asking, and at the price I was hoping for. Took about 6 or 7 days. But my location in coastal NC had a lot to do with it; we are getting a massive influx of "refugees" from the tax, traffic, crime, and politics of the NE area. One aspect of the migration I've noticed is how many folks are NOT retirees; the work-from-home phenomena looks real and a permanent, at least for quite a few jobs.

The 50 pound brains are saying a hard landing recession is likely in qtr 3 or 4 this year; with the Fed looking like bumping the rate three more times this year, they may be right. That'll push the adjustments way beyond the rate changes in the previous soft landing recessions. This is decent timing for me (and my buyer), even if it is blind luck on my part. I had taken some equity out at a low rate a while back, my "airplane" money - but gonna hold off on that now, stick with flying my club plane. Prices for solid aircraft are still a stretch for me.
 
Sundancer said:
Update! Accepted a no contingency offer very close to asking, and at the price I was hoping for. Took about 6 or 7 days. But my location in coastal NC had a lot to do with it; we are getting a massive influx of "refugees" from the tax, traffic, crime, and politics of the NE area. One aspect of the migration I've noticed is how many folks are NOT retirees; the work-from-home phenomena looks real and a permanent, at least for quite a few jobs.

The 50 pound brains are saying a hard landing recession is likely in qtr 3 or 4 this year; with the Fed looking like bumping the rate three more times this year, they may be right. That'll push the adjustments way beyond the rate changes in the previous soft landing recessions. This is decent timing for me (and my buyer), even if it is blind luck on my part. I had taken some equity out at a low rate a while back, my "airplane" money - but gonna hold off on that now, stick with flying my club plane. Prices for solid aircraft are still a stretch for me.
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Congrats on the sale!

However I question the perception of the migratees. Localities vary, of course, but they're not escaping crime by going to NC. And my one experience in driving to the Outer Banks resulted in perhaps the worst traffic experience of my life (and I live in the metro DC area, hah)

Screenshot_20230310-122633-656.png

But work-from-home certainly gives more freedom in where we can live. And I don't question that home prices and expenses are better in NC than in much of the NE.
 
Hang 4 said:
Think when you do the crime rate by state it disguises the rates in some of the cities, for example NYC vs New York State.
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Yes, of course. And that's why DC itself is dark red.

But NC has cities too. And the comparison of general violent crime rates shows that a strategy of 'moving south to escape crime in the NE' is a counterproductive approach overall.

(Edit - except for VA. Props to whatever they're doing right)
 
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Baked Potato said:
Congrats on the sale!

However I question the perception of the migratees. Localities vary, of course, but they're not escaping crime by going to NC. And my one experience in driving to the Outer Banks resulted in perhaps the worst traffic experience of my life (and I live in the metro DC area, hah)

View attachment 115677

But work-from-home certainly gives more freedom in where we can live. And I don't question that home prices and expenses are better in NC than in much of the NE.
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Oh, cool - I escaped metro DC. Perhaps you encountered beach traffic on the outer banks? That can be awful in the summer months. I live on the coastal mainland, vice the outer banks. Very close to Emerald Isle, at the south end of the barrier islands. My subjective estimate is COLA is about 20-22% lower than the MD suburbs of DC. Property and violent crime here is lower in my locale, though the urban areas of NC are much like any other in the NE. I imagine if I had relocated away from the DC and Baltimore 'burbs in MD I could have found similiar scenarios up there, except for the COLA and politics. . .
 
Sundancer said:
Oh, cool - I escaped metro DC. Perhaps you encountered beach traffic on the outer banks? That can be awful in the summer months. I live on the coastal mainland, vice the outer banks. Very close to Emerald Isle, at the south end of the barrier islands. My subjective estimate is COLA is about 20-22% lower than the MD suburbs of DC. Property and violent crime here is lower in my locale, though the urban areas of NC are much like any other in the NE. I imagine if I had relocated away from the DC and Baltimore 'burbs in MD I could have found similiar scenarios up there, except for the COLA and politics. . .
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I see, good to know. Yeah, my driving experience with the OB made me vow to never go back, though the people and scenery were very nice. Someone recently recommended a different area on coastal NC to visit instead, but the name escapes me at the moment.

I'm sure that a flight down the coast would be awesome. At the OB where we stayed there were a number of F-18s and Ospreys flying up and down the coast which was cool to watch while sitting on the beach.
 
Hang 4 said:
Think when you do the crime rate by state it disguises the rates in some of the cities, for example NYC vs New York State.
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Good point - I don't live in all of NC; I live in a small coastal town about 20-25 minutes from two mid-sized and more "urban" areas. NC has some rough cities, but it's also a big state, bigger than VA, actually. I was living in a MD 'burb very close-in to DC; my exposure to crime in y new locale is markedly lower.
 
Baked Potato said:
I see, good to know. Yeah, my driving experience with the OB made me vow to never go back, though the people and scenery were very nice. Someone recently recommended a different area on coastal NC to visit instead, but the name escapes me at the moment.

I'm sure that a flight down the coast would be awesome. At the OB where we stayed there were a number of F-18s and Ospreys flying up and down the coast which was cool to watch while sitting on the beach.
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When I go to the outer banks, or Cape Cod, I go via a small plane. No way, would I consider driving to either one if I can avoid it.

Tim
 
Baked Potato said:
I see, good to know. Yeah, my driving experience with the OB made me vow to never go back, though the people and scenery were very nice. Someone recently recommended a different area on coastal NC to visit instead, but the name escapes me at the moment.

I'm sure that a flight down the coast would be awesome. At the OB where we stayed there were a number of F-18s and Ospreys flying up and down the coast which was cool to watch while sitting on the beach.
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Yeah, USMC aviation is big here - 1/4 of the Marine Corps is stationed in coastal NC - the Wright Bros memorial/museum has a public use runway - you can drop int, park your aircraft, and take a very short walk over to see it all. On a clear day the view over the outer banks is dramatic.

The airspace here took me by surprise - it's "tighter" than the DC/Baltimore area. I was flying out of College Park in MD, out of the FRZ with a pin, but once clear of the Class B it was pretty open; in this area there are a lot of MOA, Restricted, Warnings, etc. ATC has been cordial, and the volume of traffic is somewhat less. Radar coverage is good, but radio is spread a little thin between the innland cities and the coastal controlling agencies.
 
Sundancer said:
Yeah, USMC aviation is big here - 1/4 of the Marine Corps is stationed in coastal NC - the Wright Bros memorial/museum has a public use runway - you can drop int, park your aircraft, and take a very short walk over to see it all. On a clear day the view over the outer banks is dramatic.

The airspace here took me by surprise - it's "tighter" than the DC/Baltimore area. I was flying out of College Park in MD, out of the FRZ with a pin, but once clear of the Class B it was pretty open; in this area there are a lot of MOA, Restricted, Warnings, etc. ATC has been cordial, and the volume of traffic is somewhat less. Radar coverage is good, but radio is spread a little thin between the innland cities and the coastal controlling agencies.
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Certainly putting this on my bucket list, along with the Hudson River Corridor.
I'm still a student so couldn't fly to the OB last time, maybe next time I can!!

Being that I'm near DC too, and deal with the SFRA, I am quickly becoming familiar with complicated airspace :D
 
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Baked Potato said:
Yes, of course. And that's why DC itself is dark red.

But NC has cities too. And the comparison of general violent crime rates shows that a strategy of 'moving south to escape crime in the NE' is a counterproductive approach overall.

(Edit - except for VA. Props to whatever they're doing right)
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Probably pricing out a lot of the lower financial class of people that tend to be involved in violent crimes in the first place. Hard to have a lot of gang violence when you live in an area too expensive for gangs to live/travel to.
 
SoonerAviator said:
Probably pricing out a lot of the lower financial class of people that tend to be involved in violent crimes in the first place. Hard to have a lot of gang violence when you live in an area too expensive for gangs to live/travel to.
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I would hazard that is a stereotype. When you look into the violent crime stats, and the kinds of crimes reported, it does not meet most expectations or stereotypes.

Tim
 
tspear said:
I would hazard that is a stereotype. When you look into the violent crime stats, and the kinds of crimes reported, it does not meet most expectations or stereotypes.

Tim
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I'm just using gand violence as an example. Use domestic violence instead. It doesn't matter. The point is that those on the lower end of the financial spectrum tend to have higher instances of violent crimes. If you have an area that gets gentrified for long enough, those at the lower end of the spectrum get forced into other areas (states in this case) which have a lower cost of living.
 
A number of people did find out after they moved that for Federal workers, a large portion of your pay is Locality Pay. Based on where you live as well as work. When they moved out of the DC (or other high priced Locality), there pay went down, A LOT.

Someone making $112,000 in DC drops to $98,000 if they move to TN or much of NC. That is a 12.5% decrease.
 
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